Question

1. Today, a bond has a coupon rate of 8.18 percent, par value of 1,000 dollars, YTM of 6 percent, and semi-annual coupons with the next coupon due in 6 months. One year ago, the bond’s price was 1,022.04 dollars and the bond had 19 years until maturity. What is the current yield of the bond today? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.

2. One year ago, a bond had a coupon rate of 10.5 percent, par value of $1000, YTM of 7.96 percent, and semi-annual coupons. Today, the bond’s price is 916.6 and the bond has 6 years until maturity. What was the current yield of the bond one year ago? The next coupon is due in 6 months. Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.

3. Six months ago, a bond had a coupon rate of 7.28 percent, par value of $1000, YTM of 9.4 percent, and semi-annual coupons. Today, the bond’s price is 936.52 and the bond has 7 years until maturity. What was the current yield of the bond six months ago? The next coupon is due in 6 months. Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.

Answer #1

**Answer to Question
1:**

Par Value = $1,000

Annual Coupon Rate = 8.18%

Annual Coupon = 8.18% * $1,000

Annual Coupon = $81.80

Semiannual Coupon = Annual Coupon / 2

Semiannual Coupon = $81.80 / 2

Semiannual Coupon = $40.90

Annual YTM = 6.00%

Semiannual YTM = 3.00%

Time to Maturity = 18 years

Semiannual Period = 36

Current Price = $40.90 * PVIFA(3.00%, 36) + $1,000 * PVIF(3.00%,
36)

Current Price = $40.90 * (1 - (1/1.03)^36) / 0.03 + $1,000 *
(1/1.03)^36

Current Price = $40.90 * 21.832252 + $1,000 * 0.345032

Current Price = $1,237.97

Current Yield = Annual Coupon / Current Price

Current Yield = $40.90 / $1,237.97

Current Yield = 0.0330

2. Today, a bond has a coupon rate of 8.4 percent, par value of
1,000 dollars, YTM of 4.82 percent, and semi-annual coupons with
the next coupon due in 6 months. One year ago, the bond’s price was
1,041.94 dollars and the bond had 17 years until maturity. What is
the current yield of the bond today? Answer as a rate in decimal
format so that 12.34% would be entered as .1234 and 0.98% would be
entered as .0098.
3....

Today, a bond has a coupon rate of 9.82 percent, par value of
1,000 dollars, YTM of 5.44 percent, and semi-annual coupons with
the next coupon due in 6 months. One year ago, the bond’s price was
986.71 dollars and the bond had 11 years until maturity. What is
the current yield of the bond today? Answer as a rate in decimal
format so that 12.34% would be entered as .1234 and 0.98% would be
entered as .0098.
Help on...

HW9 #1)
Today, a bond has a coupon rate of 6.62 percent, par value of
1,000 dollars, YTM of 11.3 percent, and semi-annual coupons with
the next coupon due in 6 months. One year ago, the bond’s price was
969.92 dollars and the bond had 10 years until maturity. What is
the current yield of the bond today? Answer as a rate in decimal
format so that 12.34% would be entered as .1234 and 0.98% would be
entered as .0098.

1. One year ago, a bond had a coupon rate of 10.5 percent, par
value of $1000, YTM of 7.96 percent, and semi-annual coupons.
Today, the bond’s price is 916.6 and the bond has 6 years until
maturity. What was the current yield of the bond one year ago? The
next coupon is due in 6 months. Answer as a rate in decimal format
so that 12.34% would be entered as .1234 and 0.98% would be entered
as .0098.

1. One year ago, a bond had a coupon rate of 9.78 percent, par
value of $1000, YTM of 7.12 percent, and semi-annual coupons.
Today, the bond’s price is 1,038.21 and the bond has 9 years until
maturity. What was the current yield of the bond one year ago? The
next coupon is due in 6 months. Answer as a rate in decimal format
so that 12.34% would be entered as .1234 and 0.98% would be entered
as .0098.

HW9 #2)
One year ago, a bond had a coupon rate of 11.1 percent, par
value of $1000, YTM of 5.42 percent, and semi-annual coupons.
Today, the bond’s price is 1,076.21 and the bond has 9 years until
maturity. What was the current yield of the bond one year ago? The
next coupon is due in 6 months. Answer as a rate in decimal format
so that 12.34% would be entered as .1234 and 0.98% would be entered
as .0098.

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Investment A is expected to produce annual cash flows forever. The
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1. Bonds issued by Fairfax Paint have a par value of 1000
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1. Cy owns investment A and 1 bond B. The total value of his
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Investment A is expected to produce annual cash flows forever. The
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Cy owns investment A and 1 bond B. The total value of his
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